In the framework of the Bloomberg Crypto Summit event, this Thursday, February 25, the issue of the so-called preferential brokerage ( prime brokerage , in English) in the bitcoin area was addressed and cryptocurrencies. Mike Belshe, co-founder and CEO of BitGo, and Genesis CEO Michael Moro participated.
The main or preferred brokerage groups a set of services that Investment banks and other financial institutions have been offering hedge funds and similar clients. These services include custody, loan and securities reconciliation, settlement, and consulting, as well as analysis and management of risk. The objective of the forum on preferential brokerage at the Blomberg event was to raise the opportunities it presents in the area of investing in cryptocurrencies.
Michael Moro begins by talking about the differences between the preferential brokerage services in traditional finance and the offer of these in the area of cryptocurrencies.
What BitGo and Genesis are doing in the area of these services for the world of cryptocurrencies is a product that stems from decades of a similar work in traditional finance brokerage, mainly to meet the requirements of hedge funds.
Michael Moro, CEO of Genesis.
The executive says that the intention is to create a comprehensive solution, which groups together various services, so that hedge funds can use the platforms of the preferred brokers for their transactions, loan and custody requirements, as well as administration of funds. “At the present time in the world of cryptocurrencies, we are trying to establish a bridge between traditional Wall Street and the world of cryptocurrencies.”
The idea is to make the experience of working with cryptocurrencies very similar to what can be expected from the traditional preferred brokerage environment, Moro emphasizes. “The differences do not come only from the type of product, but from the regulatory perspective. They must be taken into account in order to build that bridge that we mentioned, which joins the two worlds », said Moro.
For Mike Belshe, potential clients already have expectations about preferred brokers and they must meet those expectations. The tasks that ensure compliance with existing legislation, in the face of regulators, are the most demanding for companies that provide brokerage services, he points out. “And then, what we want is to take advantage of the advantages of cryptocurrencies, which are based on transparency and openness, and make sure that these are projected in the financial system of the future,” says the executive.